Crowdcube pitchers are informed by the platform that if they reach 50% of their stated target, this releases new Crowdcube PRExtra, which will promote the pitch.
We didnt know this and we have been involved with the platform since its inception. It's not really a problem unless investors dont know about it - and we are pretty sure they dont. Well now they do.
We came across this when one of the pitches, currently live on the platform, sent emails to existing investors asking them to push the company over the 50% line, in order to activate the powerful Crowdcube PRExtra machine. For this they promised to up the rewards to investors.
This doesnt really sound like a very sensible way to operate a business or a funding model that uses tax payers EIS monies. Surely the underlying viability of the business to deliver on its projections should be the driver for the crowd to invest? Not some smoke screen PR blitz hatched behind closed doors and known only to the company and the platform.
The pitch has someway to go to get to 50% and has almost run its course. We think there are fundamental business reasons for this. It will be interesting to see if PR wins over business sense.
As a recent anecdote, the now catastrophically collapsed GF Foods, manipulated its second raise on Crowdcube in order to squeak over the line, only to take all investors down with it, just over a year later.